Price controls for non-independent distribution networks

Ofgem letter (5 pages, scanned PDF) on regulatory arrangements for cases where an affiliate of a main electricity distribution network operator operates an independent distribution network within the same area. The main proposal is to treat such an independent network operator as part of the main operator price control in future price control reviews (in addition to requiring it to comply with the relative price control on an ongoing basis). Ofgem considers that this would remove any financial benefit to the distribution network operator from setting up such an affiliate, and address the concerns raised in the April 2006 consultation.

The Competition Act 1998 is mentioned but no specific proposals are made to help avoid any predatory or exclusionary price squeeze by incumbent network operators in their dealings with independent distribution network operators.

For further information or advice please contact Franck Latrémolière.

Filed under Electricity, Ofgem, Price controls.

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